Euro-Sterling Offers Attractive Risk-Reward Through Range Trading

The EURGBP has remained one of the prime range trade targets through the past weeks of trade, with our recent buy recommendation panning out well through the short-term. We believe that the pair may encounter fairly significant resistance from above, however, leaving a solid risk-reward on a medium term EURGBP short.


Trading Tip - The EURGBP has remained one of the prime range trade targets through the past weeks of trade, with our recent buy recommendation panning out well through the short-term. We believe that the pair may encounter fairly significant resistance from above, however, leaving a solid risk-reward on a medium term EURGBP short. Event risk is limited through the coming week of trade, but continued EUR momentum leaves the pair to test aforementioned price ceilings on extension above 0.6799. We will be sure to update the progress of the trade through our Range Trader under DailyFX+.
Event Risk Euro-zone and the UK
Euro-zone - Event risk out of the Euro-zone will be contained to German this week, and both the IFO survey of investor sentiment and the GfK consumer confidence survey could take a sharp hit given the volatility witnessed in the financial markets and concerns that the ECB will move to hike rates once again in September by 25bps to 4.25 percent. On August 30th, labor market data will be released. The unemployment rate is anticipated to fall to a 15 year low of 8.9 percent, but the major market mover will be the unemployment change, as the figure rarely hits estimates dead-on and can provide surprising results.
UK - On August 30th, UK housing data could prove to be important for GBP trade as credit jitters have reportedly led wealthy potential homebuyers in the UK to hold off from purchasing properties, as they worry about the future of their bonuses. The same morning, M4 money supply will hit the tape. However, this will only gain attention if the figure is revised from initial estimates, with a jump in money supply adding to speculation of a rate increase by the Bank of England in coming months.
Data for August 26 - August 30 Data for August 26 - August 30
Date Euro-zone Economic Data Date UK Economic Data

Aug 28 German IFO (AUG) Aug 30 Nationwide House Prices (AUG)
Aug 29 German GfK Consumer Conf (SEP) Aug 30 M4 Money Supply (JUL F)
Aug 30 German Unemployment Change (AUG)

Written by David Rodriguez and Terri Belkas, Currency Analysts for DailyFX.com